Robert Samuelson: The American Dream’s empty promise

September 23, 2012

It’s time to retire the American Dream — or at least give it a long vacation. We ought to drop it from our national conversation. This would be a hardship for politicians and pundits, who use “the American Dream” as a rhetorical workhorse embodying goals embraced by almost all Americans. That’s the problem. The American Dream has become so expansive in its meaning that it stifles honest debate and harms some of the very people it is intended to help.

Who can oppose the American Dream? No one. It captures our faith in progress, opportunity and striving. It reflects hopes for a large and stable middle class. Everyone would go to college, become a homeowner. Children would always live better than their parents.

This election often seems a contest over whether President Obama or Mitt Romney can best restore the Dream. To the extent people believe this, one outcome is certain: disappointment. The Dream’s ultimate appeal lies in its promise of personal fulfillment, which can’t be assured.

Curiously, history confirms this. Despite its present popularity, the phrase “the American Dream” came into common use only after the 1970s. By most accounts, historian James Truslow Adams coined it in his 1931 book “The Epic of America.” Adams imagined a “social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are.”

But the phrase languished, probably because it seemed contradicted by experience. For most Americans, life had always been a struggle. Little was guaranteed. By contrast, Adams’s lofty vision was utopian.

Now it’s become an informal entitlement. Credit Bill Clinton, if anyone, for this. He popularized the notion that Americans “who work hard and play by the rules shouldn’t be poor.” So, if people are purposeful and responsible, society — through government — should build pathways to the Dream and all it implies (a good job, decent home, more freedom and choice).

Personal responsibility warranted collective action. But in practice, the pathways often led to dead ends. A college degree, it was argued, meant better jobs; therefore, it made sense to subsidize loans allowing more students to go to college. With higher-paying jobs, borrowers could easily service their loans. This worked for some, though not for all. Many students were left with heavy debts and no degree.

A study from economists at the Kansas City Federal Reserve reports: Fewer than 60 percent of college freshmen graduate within 6 years; student debt now totals about $1 trillion; for 25 percent of borrowers, annual repayments exceed $4,584; default rates are almost 9 percent. “Defaulted borrowers may be sued, tax refunds may be intercepted, and/or wages may be garnished,” the report notes.

The plugging of homeownership — the quintessential symbol of “making it” — is another perverse pathway. True, homeownership is a laudable goal; it stabilizes neighborhoods, for example. But the promotion went overboard. Lax lending standards lured people into buying homes they could not afford, contributing to the 2007-09 financial crisis. Again, victims were the intended beneficiaries; since 2007, at least 5 million Americans have lost homes through foreclosure, reports CoreLogic.

There is nothing wrong with a little over-the-top optimism and hope. It is inevitable and even healthy, if it makes people feel good and inspires them to rewarding behavior. The trouble with our American Dream infatuation is that it transcends these common-sense boundaries. It has become a substitute for addressing real problems and a collective act of self-deception.

The invocation of the American Dream presumes that there are no conflicts among groups. With the correct mix of personal responsibility and government programs, everyone can achieve the Dream. But some conflicts cannot be wished away. One is between young and old. As baby boomers retire, federal spending on the elderly will soar. This will help retirees attain their dreams, while making it harder — through higher taxes or lower public services — for the young to realize theirs.

What also cannot be wished away are on-the-ground realities that impede middle-class status for more Americans. Only one-third of children born to the poorest fifth of Americans graduate high school with at least a 2.5 grade-point average and without having become a parent or been convicted of a crime, reports a Brookings Institution study. Brookings economist Isabel Sawhill notes that gaps have widened between the children of poor and well-to-do families on school test scores, college attendance and family formation. In his book “Coming Apart,” conservative scholar Charles Murray makes similar points.

Government has only limited power to offset these disadvantages. The appeal of the American Dream is that it’s disconnected from nasty facts and choices. It’s a slogan that shouldn’t survive — but will endure precisely because it’s an exercise in make-believe.

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